XRP technical analysis: fading bullish pressure may allow $1.20 re-test

Utkarsh Gupta

XRP is currently riding strong bullish momentum in the market. Over the past week, the asset has risen by 13.2%, taking back its 7th position in the chart. However, at the moment, it is facing strong resistance from the key price range. The next few hours might be critical for XRP as certain bearish signs were observed. XRP had a market cap of $58 billion at press time with a 24-hour trading volume of $5.5 billion.

XRP 4-hour time frame

Source: Trading View

XRP has been undergoing a bullish recovery since dropping down to $0.95 on October 27th. After reaching a high of $1.26 on 4th November the asset started to decline. However, the price started to oscillate between a falling wedge pattern, as observed in the chart. A falling wedge is a bullish breakout pattern, and XRP registered a breakout on 7th October. In a similar fashion to 4th November, XRP reached another ceiling after the price reached $1.30.

$1.30 is currently a daily higher time frame resistance. Its inability to breach above $1.30 suggests that XRP might undergo a correction over the next 24-48 hours. At press time, a Lower Time Frame target of $1.23 could be tested but the possibility of dropping down to $1.21 is also likely.

Market Indicators

Source: Trading View

Market Indicators suggested contradictory signals for the asset. According to the Relative Strength Index or RSI, the market is currently overbought. It means selling pressure may increase in the near term as buying pressure will decrease in the chart. Stochastic RSI indicated a similar bearish trend. Whenever the orange line hovers over the blue line, it usually leads to a strong price drop.

However, MACD or Moving Average Convergence Divergence suggested that bullish momentum had an upper hand.

How to trade this market

In order to reduce risk, it is advisable to avoid leverage trading at the moment. Clear breakouts are not available, as both bullish and bearish directions are feasible. However, for spot traders, a buy entry between $1.15-$1.20 could be a profitable entry over the long term.